The subject invention relates to a method and system for facilitating transactions such as purchases. More particularly it relates to a method and system for facilitating transactions between a first party (sometimes hereinafter a “buyer”) and second party (sometimes hereinafter a “seller”) where the parties do not have a basis for trust.
A problem in completing a transaction between parties who may have little or no knowledge of each other, or worse too much knowledge, is the need to establish trust. One prior solution was for one party to provide the other with a tangible token, typically a paper document, which would serve as proof that the first, providing party had or would fulfill his or her obligations in the transaction; where the authenticity of the document was readily apparent, such as by recognizable visible characteristics. For example a buyer may give a seller a twenty-dollar bill in payment. The seller trusts that payment in the amount of twenty dollars has been received because the bill is “signed”, i.e. authenticated, by an elaborate combination of engraving, watermarks, special paper, etc. Or the buyer may offer a check in payment and the seller may request identification. A seller will trust a driver's license or passport because the picture affixed matches the bearer and because it has been “signed” in various ways by the issuing agency. Similarly a buyer may require a signed receipt as proof of purchase so a refund or repair or replacement can be obtained if the purchased goods or services are defective or unsatisfactory.
(As used herein the term “obligation” is meant broadly to include anything which a party must do or prove to complete a transaction. It includes not only payment and providing of receipts but also proof of identity, entitlement, status or authority where necessary. The term “transaction” is also meant broadly to include any significant commercial, financial, or similar interaction between parties).
Use of such tokens or documents has proven satisfactory as a means of carrying out transactions for many years, indeed for many centuries. However use of such tokens does present problems. To carry out the affairs of everyday life a party must carry many documents or tokens: some cash, licenses, identification papers, documents or tokens which evidence status or authority (e.g. a police badge or identification card), tickets, passes, coupons, etc. The possible list of such tokens or documents is essentially endless. Typically a party will carry such documents in a wallet or purse and if that wallet or purse is forgotten, or does not contain what is expected, serious embarrassment or inconvenience can result. Or if the wallet or purse is lost or stolen the owner may suffer serious losses. Any cash is likely lost. And a thief or dishonest finder can possibly access the owner's accounts, make fraudulent purchases using the owner's credit cards, incur substantial debts using the owner's identity and commit other fraudulent acts limited only by his or her creativity and ingenuity.
Recently a new approach to the problem of providing a basis for trust between parties has been developed and is exemplified by payment services such as the service provided under the tradename “PayPal”, which uses digital signatures in lieu of visible ones. Instead of “signed” paper documents digitally signed electronic documents are provided to, i.e. transmitted to a computer available to, those from whom trust is sought. The recipient's computer can then use public key cryptography to verify the signature on the electronic document since the recipient knows, because he or she is using a known computer which is programmed to communicate with the payment service, that the electronic documents have been transmitted through the payment service and the recipient trusts the service to have authenticated the digital signature.
This approach has proven useful in areas such as internet sales but presents problems with respect to more typical transactions where the other party will typically not have access to a computer. One way to resolve this difficulty would be for the first party to use a portable computer (e.g. a Personal Digital Assistant or PDA) to initiate a transaction and then loan it to the second party, from whom trust is sought, to verify the digitally signed documents. The problem with this is that a dishonest first party could program his or her computer to fraudulently present false information.
Thus it is an object of the subject invention to provide a method and system for facilitating transactions by establishing trust between parties in a way which does not require the first party, seeking trust, to carry tangible tokens as evidence that the first party will fulfill his or her obligations. It is another object of the subject invention that the second party, from whom trust is sought, need not have access to a communications device to the second party.